Former king of social networks in the U.S. and current king in parts of Asia -- Friendster -- is reportedly for sale.

A long time ago in a social network galaxy far, far away there lived a social network called Friendster who was king of the new media. Friendster was as popular in 2003 as Facebook is in 2009, so popular in the United States in 2003 and 2004, for example, that U.S. presidential candidates created their user profiles on it to promote their run for office.

Exciting stuff from the early days of social networking. Wait a minute, kind of sounds like the dribble being shared on Facebook and Twitter (or any social media) today.

At one point in 2003 Google was going to acquire Friendster for $30 million in pre-IPO Google stock. Today it would be valued in the tens of billions $. But the Friendster board said no, thinking Friendster could go public itself and be a multi-billion dollar winner.

Sound familiar? same sort of spiel Facebook is talking about today.

When Yahoo went public in April 1996 I was one of the only analysts at the time to value it. Since then I've done valuations for well over one thousand Internet companies of every size. So with Friendster being for sale I wanted to share with you what it could be valued at. The one thing to remember in any valuation is that something is valued by buyers more than sellers. What an acquirer would pay is ultimately the value. So anyone doing valuation work can only come up with comparables (companies like them) to use as a guide.

Some casual observers have used Facebook's recent $10 billion valuation as a benchmark. However, this is totally inaccurate since Facebook is in a different trajectory and market place than Friendster. It's like valuing a Yugo based on a Ferrari with the observation: both have 4 wheels and 2 doors.

Instead, I look at the individual company and its prospects as an independent concern. Friendster's overall numbers are impressive: a reported 100 million users worldwide. About 75 million of those are in Asia. The challenge is that most of those 75 million are in the Philippines, Indonesia, Malaysia and Singapore -- not countries with a lot of online advertising or ecommerce to pay Friendster's bills. Friendster is reported to have about 500 million daily page views and 100,000 new members joining daily.

Here's the bottom line: Friendster is only valuable in my opinion as a quick way for Facebook to dominate parts of Asia. That's it. Other than Facebook there's no "natural" buyer out there. Remember, AOL bombed with buying Bebo.

To be attractive to Facebook I think Friendster has to answer two questions: what can Friendster save Facebook in marketing and time to market for Asia? What are Friendster's 75 million Asian users worth to Facebook?

Given Facebook's recent $10 billion valuation round the question for Facebook is how much of Facebook stock would it be willing to part with to acquire Friendster? You also have to count the upside is Facebook stock. Assuming Facebook can generate strong revenue from ads, payment services, ecommerce, virtual goods (like many Chinese networking sites) then Friendster should be willing to accept a lower deal price in order to get the upside in Facebook stock.

My estimated value for Friendster is $100 million if Facebook were to buy it in a stock transaction.

The key challenge for any social network is how valuable are "connections" and the content people create? For the most part, sites like Facebook have failed to offer users more than just surface-level interaction. In many ways Asian social sites are ahead.